Developing The Space Ecosystem in India

Developing the space
ecosystem in India:
focusing on inclusive
growth
October 2022
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Developing the space ecosystem in India: focusing on inclusive growth
Foreword
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Foreword
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Jayant D Patil
Chairman, ISpA
Member of Executive Council of Management & amp;
Advisor (Defence & Smart Technologies) to CEO & MD
Larsen & Toubro Limited, Former Whole Time Director
Larsen & Toubro Limited
“I am delighted with what ISpA has accomplished during The Space as a business is still in the infancy as far as
its maiden year having witnessed a dream launch by the Indian entrepreneurs are concerned as sectoral policy is
Visionary Prime Minister of India, Shri Narendra Modiji, still under clearance. Our initiatives and actions at policy
who believes in the potential the Space Sector holds advocacy would shape the business models and reach
and that with India’s prowess in Tech Services sectors, while underscoring enterprise and B2B setups as India
Scientific Temper & Talent, ability to Innovate and awaits to build a significant presence in the global space
demographic dividend the country is blessed with to market. There are underlying challenges to overcome,
take a prominent position in the Global Space Arena. especially for the start-ups but the Government has
As we celebrate ISpA’s first anniversary, I congratulate resolved to provide these enterprises with necessary
each member of the ISpA team for their undaunted policy support and handholding to grow and accomplish
efforts throughout this year-long journey. It is highly their missions.
commendable to witness the position of prominence
The report sums up the concerted efforts and inputs
that ISpA has gained to be a thought partner to Dept of
gathered from space regulatory bodies as also extensive
Space, Dept of Telecom, ISRO, and regulators such as
research pertaining to the domain. The resultant
TRAI, IN-SPACe.
recommendations advocate “adoption in policy
As India entered the “Amrut kal” with eyes focused framework to take care of the interests of the investors
on India@100, it is in the fitness of things to unfold and stakeholders.”
a “thought document” that takes stock of where we
are, what has been accomplished, envision futuristic
perspective on the development of the ‘Space Ecosystem’
and building a position of prominence with the long-
term vision at the backdrop of our thoughts. Releasing
such a document on the eve of the Association’s maiden
anniversary reflects our intent to promote global
research in policy making and provide thought guidance
for actions in various segments of the space sector.
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Lieutenant General Anil
Kumar Bhatt (Retd) PVSM,
UYSM, AVSM, SM, VSM
Director General, ISpA
My heartfelt best wishes and felicitations to the Taking note of the new Indian
amazing team of ISpA on the first anniversary, I feel Telecommunication Bill 2022, we are sanguine
honored to be a part of this exuberant association. that the aspirations and the interests of
It gives me utmost happiness to witness the release our nascent space industry are taken into
of the thought document that unfolds a great vista consideration given the vital role that Satellite
in the domain of the space technology industry. Communication will play in meeting the national
aspirations of bridging the digital divide,
The nation beholds a paradigm change which is an
especially in the remotest of geographies.
outcome of the historical decision of the Honorable
Foreword
Prime Minister to open space to the private sector. This report has compiled inputs from the
The Indian space ecosystem, which was entirely led industry and outcomes of the research on
by Indian Space Research Organization (ISRO), has satellite space in India. The recommendations
now transformed itself into an ‘ISRO Enterprise’ quoted through examples can guide the policy
which includes ISRO, private industry, and new directives and hence provide deep insights
startups. needed for the decisions to be taken in the
future.
With the scientific legacy of ISRO, the enterprise
of our industry, the zeal of our startups, and the
resolve of our government, we are sure to create a
global class space ecosystem in India.
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Prashant Singhal
Emerging Markets TMT

Leader, EY
By connecting the unconnected, space-based The satellite services and application market in India
communication will be one of the primary mechanisms will be driven by greater demand for high bandwidth
to narrow the digital divide in India. The sheer reach of and lower latency data requirements, connect the
satellites and the ability to quickly establish connectivity unconnected with voice and data communication
make it extremely versatile in areas where terrestrial services, and increase in IoT and autonomous systems.
communication is difficult to reach. India’s overall In addition, an increase in demand for military and
tele-density stands at 85.1% at the end of July 2022, defense satellite communication solutions is likely to
with rural tele-density just crossing the 58% mark. spur the market forward. From an end-user industry
Satellite connectivity, in conjunction with a terrestrial perspective, media and entertainment to account for
communication network, can help to improve tele-density 26% of the total services market by 2025, followed by
significantly. As we have witnessed globally as well as retail and enterprise at 21% and Defense at 20%. The
in India, high-quality broadband connectivity is vital for remote sensing segment is expected to register one of
economic growth and prosperity. Satellite connectivity is the highest CAGR through 2025, driven by an increase
key to enhancing digital inclusion by opening-up access in resolution of commercially available imagery and
to the online world. Today, space-based connectivity adoption of new-age technologies.
is seen as a viable alternative for consumers and
Currently, India boasts of over 100 spacetech startups.
businesses alike.
The year 2021 was a watershed year for spacetech
The importance of the space industry in India is ratified startups, with investments reaching US$68m, a
in its role in enabling services and applications across y-o-y increase of 196%. There were a total of 47
several domains, including media and entertainment, new spacetech startups established in India in 2021
weather forecasting, disaster management, agriculture, alone. Key drivers for investment in the Indian space
geological and oceanographic studies, navigation, segment are involvement of private players, lower costs
broadband services, and remote sensing. The opening up for developing and launching satellites, promise of
of the space economy to private participation across all substantial Return on Investment (RoI) and technological
phases of activities heralds an era of growth, innovation, advancement in the space industry.
and accelerated investment in the sector. This is truly
A conducive regulatory and policy framework will
game changing. Now is the time for private companies to
go a long way in building a robust ecosystem. At
move up the value chain and catapult India on the space
the same time, promoting ease of doing business is
innovation bandwagon.
critical for investments to flow in the space domain.
The satellite manufacturing space offers significant For instance, a single window approval process will
potential for growth, riding on the back of the ‘Make significantly reduce time for decision making. The
in India’ initiative and increasing demand for small overall attractiveness of the sector needs to improve
satellites. Development of spacetech parks will be for greater private participation. For this to happen,
crucial to build the manufacturing ecosystem and help a collaborative approach and inclusive engagement
to improve unit economics of satellite manufacturers by between the government, regulatory bodies, national
using shared resources and facilities. By 2025, satellite and international organization, and other stakeholders is
manufacturing will be the second fastest growing required.
segment in the Indian space economy, with launch
I would like to congratulate ISpA for their contribution
services growing the fastest. Indian companies have
to the space industry in India and congratulate them on
developed considerable expertise around satellite launch
their first anniversary. I hope this report helps to further
solutions. This segment is fast becoming a hotbed of
shape the dialogue in building the space economy in India
activity for startups and SMEs.
and transform the lives of Indians.
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About the report
The Indian Space Association (ISpA), in collaboration with EY, developed the report, titled “Developing the space ecosystem in
India: focusing on inclusive growth“. The report focuses on developing a holistic space ecosystem in India. It covers the outlook of
the space economy in India and its potential to accelerate the socio-economic development of the country. It includes the global
space economy and its growth drivers. From India’s standpoint, the report focuses on the entire lifecycle of the space economy,
including manufacturing, ground and launch segment, startups and end-user services. This report also provides regulatory
landscape and inputs from industry to propel growth in the Indian space industry.
Methodology
The report is a compilation of industry inputs and secondary research. Members of ISpA have provided key inputs on the satellite
space in India. The inputs have been backed by extensive research, analysis, and insights provided by EY. The report substantiates
its recommendations through examples and prevalent practices for policymakers to consider.
Key contributors
Anirudh Sharma
Lt. Gen AK Bhatt (Retd) Amitabh Kant Apparao Mallavarapu
Co-Founder & CEO, Digantara
Director General, ISpA CEO, NITI Aayog CMD, Centum Electronics
Space
Chirag Doshi
Col H S Shankar (Retd.) Kris Nair K Krishna
MD & CEO, Walchandnagar
Chairman & MD, ADTL CEO, Kawa Space Vice President & CTO Hughes
Industries
Lakshmesh B H Narayan Prasad

Neha Satak PJ Nath
Head Missiles & Aerospace, Cofounder at Spaceport
CEO, Astrome Technologies MD & CEO, Nelco
L&T Sarabhai
Dr Pawan Goenka Pawan Kumar Chandana Radhakrishnan Durairaj Rahul Vatts

Chairperson, IN-SPACe CEO, Skyroot Aerospace Chairman & MD, NSIL Director, One Web India
Maj Gen (Dr) Siva Kumar

(Retd.)
Raj Kumar Ravinder Pal Singh Rohan Verma
Member of IIT Tirupati
Director, NRSC Partner, Kalaari Capital CEO & ED, MapmyIndia
Technology Innovation Hub,
Board and Director IIT Tirupati
Sunil Indurti
Suneel Niraniyan Wing Commander
Sunil Bharti Mittal Director of Business
DDG Satellite, Department of Satyam Kushwaha (Retd)
Chairman, Bharti Enterprises Development
Telecommunications Director ISpA
Azista-BST Aerospace Pvt Ltd.
EY report development team: Kaustav Bandyopadhyay, Parul Malhotra, Vikash Kukreti
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Four pillars for growth in the space ecosystem
Hon’ble Prime Minister of India Shri Narendra Modi’s Vision – “India is introducing pioneering space reforms which will provide
an opportunity for both industry and academia. Time has come for private and public sector should emerge and fly. India in its
75th year of independence has opened the private sector as a gift to India. In this sector, after many reforms suggested, this
initiative has been launched. In a short time ISPA has been conceived and launched. All stake holders are attending this today.
This will make a difference to the poorest person in the country. The enthusiasm toward this initiative is remarkable, and I am
looking forward.”
“Hope space and telecom sector reach out to remote areas where digital technologies could not
reach via conventional methods - Ashwini Vaishnaw, Minister of Railways, Communications and
Electronics & Information Technology
Space sector as
a resource for “Advances in technology on both ground and space segment specially through high satellites and
the progress of low Earth Orbit (LEO) and Medium Earth Orbit MEO satellites, are able to provide solutions for
common man many applications, be it low latency, higher bandwidth and enhanced speeds. These features can
be leveraged for social economic benefits across multiple sectors” – K Rajaraman, Chairman DCC
& Secretary (T) Department of Telecommunications, Ministry of Communications
“There is a need, more urgent than before, to go for policies which attract investment, allow use
of space technology for common man and ensure flexibility and ease of doing business” – PD
Vaghela, Chairman, Telecom Regulatory Authority of India
“We have to work through ISpA and other bodies on how we can enhance capital adequacy to all
SMEs, skill development and research with academic institutions to create our own intellectual
property” – Chirag Doshi, MD & CEO Walchandnagar Industries
Prepare the “ISpA should engage further with students, start-ups, academia, engineering and research
youth for future institutions, think tanks in order to spread awareness, skills and build a human resource pool of a
wider nature and not get tied down in silos” – Dr. Jitender Singh Ministers of State (IC) of Earth
Sciences, Science and Technology, Minister of State of Atomic Energy, Space, Prime Minister
Office, Personnel, Public Grievances and Pensions
“Over the last six to seven years, there is no degree or competency in systems engineering — which
is very important in producing complex space systems. We need to build in experimentation and
failures as part of growth strategy” – Mr. Lakshmesh B, Head Missiles & Aerospace, L&T
“Advances in technology in ground and space segment both specially through high through put
satellites and low LEO and MEO satellites are able to provide solutions for a large number of
applications be it low latency, higher bandwidth and enhanced speeds. These features can be
Innovation leveraged for social economic benefits across multiple sectors” - K Rajaraman, Chairman DCC, &
Independence to Secretary (T) Department of Telecommunications, Ministry of Communications
Private Sector “Hope space and telecom help to reaching out to these sections and remote areas where
conventional methods could not take digital technologies” – Ashwini Vaishnaw, Minister of
Railways, Communications and Electronics & Information Technology
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“The present regulatory regime needs to be made conducive to launch of Indian Satellites and
there is a need for as simple licencing framework which needs to be technologically agnostic
rather than having separate rules for similar applications based on underlying communication
technology” – Amitabh Kant, CEO, NITI Aayog
Government to
be the enabler “Request you to work allow us to work jointly with the Ministry of Finance (MoF), Department of
Space (DOS) and your office to create an opportunity for small and medium firms (like us) to get
access to cost effective capital and potential subsidies for expansion. Similar to those given to
other manufacturing industries under Performance Linked Incentives (PLI).” – Chirag Doshi, MD &
CEO Walchandnagar Industries
“We need to have a clear vision for the next five years which has been laid out by ISRO, INSPACE,
NSIL and ISpA… and that is the in the next five years should be amongst the top ¾ players in the
global space domain” – Col HS Shankar, Chairman & MD, ADTL
“Hon’ble Prime Minister of India has initiated a three-pronged initiative to transform India into a
strong space economy Set up of INSPACe to perform the regulatory and monitoring functions, on
policy front— many initiatives such as national space policy, segment specific policies related to
remote sensing space communication, satellite navigation, human in space, FDI in space, space
transport technology transfer etc. Some have been put in the public domain to seek the views of
stakeholders and public. The third focus has been to have an industry led body which echoes the
voice of the industry — to have an interphase and hence formation of ISPA – a landmark event”
– Dr Jitendra Singh, Minister of State in the Department of Space, Minister of State
(Independent Charge) of the Ministry of Earth Sciences
“Suggestion is to make the satellite cell responsible as a single window for everything related to
satellite rather than a single window with multiple agencies behind” – K Krishna, Senior Manager
International Regulatory Affairs, Amazon
“The DoS can also come up with technology development fund from co-development of
technologies which could fuel India’s growth as per national strategy”
“I would request the Government of India to open up Department of Scientific & Industrial
Research (DSIR) tax exemptions for dedicated aerospace R&D centers” – Mr. Lakshmesh B H,
Head Missiles & Aerospace, L&T
“Support start-ups for free testing for space products in space and on ground and request
government agencies to be anchor customers to space tech start-ups” – Neha Satak, CEO,
Astrome Technologies
“Request you to please announce the new space comm policy as soon as possible, as it will help
tremendously to plan and expand our horizons. Secondly, when a new policy or license comes
in, the impact to the people and industry takes time. Also request the government to open the
flexibility to all the satellite comm providers to use any frequency band which is available.”
– PJ Nath, MD & CEO, Nelco
“Control regulatory costs – are they fair and are they comparable to global price benchmarks”
– Rahul Vatts, Director OneWeb India
Source: Inauguration of Indian Space Association ceremony and webinar, October 2021
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Contents
Executive summary 14
Global space economy to reach

US$600b by 2025 16
Indian space economy – set for

accelerated growth 22
Regulatory landscape and

challenges: liberalization of the 34
Indian space industry
Space start-up ecosystem and

investment climate 38
Defense space ecosystem – new

frontier of innovation 42
Skills development in the space

domain and empowering youth 48
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Executive summary
Today, India stands at the cusp of a technology-led It is important to adopt globally harmonized policies for space
transformation, and the space economy will play a crucial domain systems and satellite services. government of India
role in making this happen. India has a well-developed space should implement a light-touch regulatory framework that
program, boosted by the realization of indigenous technology, promotes innovation, investment, and growth, and which
facilities, systems, and rollout of services in a systematic protects satellite systems from harmful interference.
manner. The space industry has played a key role across
A conducive regulatory and policy framework will go a
several application areas, including weather forecasting,
long way in building a robust ecosystem. At the same time,
geological and oceanographic studies, disaster management,
promoting ease of doing business is critical for investments
and agriculture to name a few. Satellite broadcasting services
to flow in the space domain. The overall attractiveness of
have been the mainstay of the Media and entertainment
the sector has to improve for greater private participation.
industry in India, benefitting a large part of the population.
Policies should advocate affordability, and efficient and
So far, the space industry in India has been largely under the optimal utilization of satellite spectrum, network, and
purview of the government, with limited private participation. services. For this to happen, a collaborative approach and
Given the advancement in technologies, proliferation of inclusive engagement between the government of India,
data, and the onset of the platform economy, there is a regulatory bodies, national and international organization,
need for greater private participation and driving further and other stakeholders is required.
commercialization. Developing a self-sustaining industry
Role of Private Equity (PE)/ Venture Capital (VC) firms may
model will enhance the attractiveness of the industry greatly.
serve crucial for investments in new infrastructure and R&D
Satellites have the potential to bridge the digital divide to make India a space manufacturing hub. In addition, startup
in India. Apart from providing basic connectivity and incubators focused on the space domain can help to catapult
broadband services, satellite communication is likely to the sector on the innovation domain. Currently, there are
impact various industries in India. For instance, satellites over 100 spacetech startups in India. The year 2021 was
can provide connectivity for teachers and students to access a watershed year for spacetech startups, with investments
resources in rural and remote areas. The ubiquity of satellite reaching US$68m, a y-o-y increase of 196%.
communication, quick access, and cost-effective features
Ultimately, a platform that promotes the development of
make it an attractive proposition in the education sector.
the entire space ecosystem — design and manufacturing of
Offering digital health solutions in remote areas through
satellites and payloads, launch vehicles and launch services,
satellites is likely to open up nascent opportunities. On the
ground and space segments, space communications, satellite
other hand, equipping fishing vessels with satellite-based
communication, space-based services, spectrum management
communication systems will go a long way in disseminating
and operations, space applications, navigation applications
effective information on disaster warning, Potential Fishing
and navigation equipment design and supply — is the need of
Zones (PFZ) and other ocean-related advisories. Further,
the hour.
satellites will play a critical role in the proliferation of the IoT
sector and help to realize the full potential of interconnected
devices. Hence, the government should promote the
significance of satellite-based communication services in
the nation’s broadband agenda and other-satellite based
applications. Holistically, educating the public and other
stakeholders about space-based technology and capabilities
will invoke a lot of interest.
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Key considerations for creating an enabling space economy in India
Functional areas Key considerations
• U
► nder current framework, regulatory approvals are required from multiple agencies such
as DoS, DoT and/or MoIB for the establishment of upstream/downstream space activities. A
single window approval process through a nodal body focused on space economy shall aid
and ease the process of having in place requisite authorizations that shall further help ease of
doing business.
Regulation / policy • A
► comprehensive space policy covering upstream and downstream activities will help
formulate vision and provide policy predictability to bolster investment climate
• T
► he government may permit satellite operators to set-up their own earth stations and deliver
services to the license holders who in turn will render service to the end-users
• R
► egulatory framework should evolve to take advantage of the latest technology
• I► ntroduce Production Linked Incentive (PLI) scheme for satellite manufacturing, like mobile
Satellite manufacturing handsets and telecom equipment
• S
► atellite manufacturers should be able to access ISRO’s testing facilities
• P
► romote independent launch solutions of Indian private companies for satellites and other
Launch vehicles
spacecrafts
• Facilitate access to cost effective and early-stage capital for startups

Access to capital
• M
► ore clarity is required on FDI in the space sector
• T
► he industry should be able to access satellite technology, as cost competitiveness and price
are important.
Improve access to • I► SRO can act as an enabler for boosting R&D by way of technology transfer, collaborations, and
technology sharing of infrastructure that shall help achieve wider participation from the industry
• I► SRO can charge a very nominal fee for technology transfer to the industry
• C
► ollaboration between ISRO-academia-industry on satellite technology
• D
► evelop competency of systems engineering for space segment
• C
► onducting training on how to operate satellites skillfully — currently private sector is not
Skills development
running satellites
• N
► eed to develop technology associated with special alloy for launch vehicles
Source: ISpA, EY analysis
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1
Global space economy
to reach US$600b by 2025
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The global space economy is primarily driven by a record number of satellite launches, technology innovations, low-cost of
manufacturing, evolving end user requirements and growing communication needs. Innovation across the space value chain is
driving growth in the space industry. The commercial space economy is set to grow in future amid interest from private players
and collaboration with various governments.
The global space economy in numbers
Global space US$447b US$600b

economy
In 2020 In 2025, CAGR of 6% between 2020-25
Ground US$163b Satellite US$142b

equipment services
In 2020, (36% of space economy) In 2020, (32% of space economy)
Satellite US$14b Launch

US$6b
manufacturing
In 2020, (3% of space economy) In 2020, (1% of space economy)
Government
space budget and US$122b
commercial human
In 2020, (27% of space economy)
spacecraft
Source: Space Foundation, Satellite Industry Association, EY analysis
The US accounts for the highest proportion of operating satellites; LEO satellites form the majority of
operating satellites
Number of operating 5,465

satellites By the end of Apr’22
3% 1%
10%
24% The US LEO
China GEO
3%
63%
10% Russia MEO
Others 86% Elliptical
Source: Union of Concerned Scientists; Note: Geosynchronous (GEO), Medium earth orbit (MEO), Low earth orbit (LEO)
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The satellite ground equipment forms the largest segment of evolving globally and offers an immense opportunity for
the space economy comprising network equipment (gateways growth and innovation. More affordable launches, increased
and VSATs, network operations center) and consumer choices and capacity have led to a substantial rise in launch
equipment (Sat TV, radio, broadband equipment, navigation). activity. In 2020 alone, 1,283 satellites were launched,
The satellite services segment is witnessing a hotbed of which is the highest in a year. The increase in the number of
activity owing to the demand for high bandwidth and lower satellites is primarily due to the development of the smaller
latency, and new services driven by LEO satellites. The rise CubeSat, allowing many small-sized satellites to launch at the
of small satellites is leading to the adoption of new business same time, in contrast to one or two satellites launched at a
models and opening-up revenue streams for the satellite time earlier. The commercial space launch industry has by far
industry. The market is driven by increasing demand for seen the most disruption in the past decade compared to all
data, broadband, and voice communication services due to other areas of the overall space sector. The continued cost
rising demand in the consumer services, including direct-to- declines will further open up new markets expected to attract
home (D2H). Several downstream industries increasingly use new companies.
satellite applications. In addition, there is a rise in demand
From a regional perspective, the US, China and the European
for high-resolution imagery services in industries such as
Space Agency (ESA) collectively accounted for approximately
defense and intelligence, agriculture, transportation, and
81% of government space spending in 2020.1 It is not
construction. They use satellite imaging in applications
surprising that the US leads in the share of total active
including topographic mapping, natural disaster management,
operating satellites at 63%.
monitoring vegetation, and traffic management.
Most of the satellites manufactured in 2020 (84%) were used

for commercial communications. Other applications included
remote sensing, military surveillance, and scientific and
navigation. Scale economies in manufacturing, lower-cost
terminals, and improved capabilities add to an improving
supply-side environment. The satellite launch segment is
Changing dynamics of the global space economy
Space segments Enablers
• M
► ega constellations are increasing the demand for
ground stations (vertically integrated companies building
Ground segment
their own ground stations)
Consumer equipment – Sat TV, radio, and • I► ncrease in Global Navigation Satellite System (GNSS)
broadband; GNSS* stand-alone units and in-vehicle enabled smartphones, other devices
systems
• I► ncreased on-the-move connectivity
Network equipment – gateways and VSATs
• B
► roadband and satellite radio installations on the rise
• I► ntegration of terrestrial and satellite networks
1 “Global space economy rose to US$447b in 2020, continuing five-year growth”, Space Foundation, July 2021.
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Space segments Enablers
• T
► echnological advancements are facilitating the
Satellite manufacturing miniaturization of electronic components results in
reducing the satellite size and mass over time
LEO (are closest to users between 300-1,200 miles)
• A
► dvanced manufacturing techniques (e.g., 3-D printing)
MEO (are located between LEO and GEO satellites at and use of Commercial-off-the-shelf (COTS) components
6,300 to 12,500 miles have facilitated vertical integration, faster production
GEO (orbits at 22,236 miles and rotates at the same speeds, and cost savings
speed as the Earth’s rotation) • I► ncreasing demand from civil/government, commercial,
and military sectors
• A
► ffordable and more frequent launches; increased launch
Satellite launch activity propelled by LEOs (1,322 launched in 2021)
US launches – 40%; Non-US launches – 60% • G

► rowth in the small satellites segment has increased
demand for smaller and more cost-effective launch
114 orbital launches in 2020 vehicles (e.g., re-usable launch vehicles, ridesharing and
small launch)
• I► ncrease in IoT and autonomous systems
• G
► reater demand for high bandwidth and lower latency
data requirements
Satellite services
• I► ncreased focus on SATCOM to overcome constraints
Voice communication, broadcasting, and data associated with traditional transmission system. Minimize
communication digital divide — connect the unconnected with voice and
data communication services
• R
► ise in demand for military and defense satellite
communication solutions
• I► mproved capability and innovative application of small

satellites
Satellite applications • I► ncrease in resolution of commercially available imagery
Remote sensing (agriculture, change detection, • I► ncreased adoption of new-age technologies such as
disaster mitigation); space-based navigation; 5G/IoT, smart city proliferation, driver assistance and
geospatial; situational awareness; space autonomous vehicles and fleet management to drive
infrastructure; security and protection; scientific satellite navigation
explorations; astronomy; testing and certification
• S
► atellite-based insurance gaining traction
• A
► dvanced analytical techniques for better data processing
Source: Satellite Industry Association, EY analysis
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Space for SDGs – driving the sustainability agenda
The United Nations has developed the 2030 Agenda for Sustainable Development to address challenges in the form of 17
Sustainable Development Goals (SDGs) with 169 associated specific targets.2 The space industry is expected to play a crucial role
in achieving the United Nation’s Sustainable Development Goals (SDGs).
SDG no. SDGs Satellite application areas
1 No poverty Natural disaster forecast; Crop productivity optimization
2 Zero hunger Crop productivity optimization; Livestock management optimization
Prevention of vector diseases; Disability assistance; Air quality monitoring; Reduction of air
Good health and
3 pollution through road traffic optimization; eCall emergency response service; Wearables
wellbeing
for health promotion and disease prevention
Clean water and

6 Water quality monitoring; Meteorological forecasting
sanitation
Affordable and clean Infrastructure monitoring; Power grid synchronization; Seismic surveying; Solar and wind
7
energy energy production forecasting
Decent work and

8 Supporting global economies; GDP growth; Lone workers monitoring
economic growth
Industry, innovation,
9 Infrastructure mapping and monitoring; Construction surveying; Smart mobility
and infrastructure
Sustainable cities Urban planning; Infrastructure monitoring; Improvement of city services; Air quality
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and communities monitoring; Disaster management; Search and rescue operations
Responsible
12 consumption and Natural resources management; Food and dangerous goods traceability
production
13 Climate action Climate change monitoring; Disaster management; Search and rescue operations
14 Life below water Mapping and monitoring of natural and protected areas
15 Life on land Bio-geophysical land surface monitoring; Animal tracking
Source: UNOOSA
2 “Space Supporting the Sustainable Development Goals,” UNOOSA, https://www.unoosa.org/oosa/en/ourwork/space4sdgs/index.html,

accessed 23 September 2022.
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2
Indian space economy -
set for accelerated growth
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India has a well-developed space program, boosted by the realization of indigenous technology, facilities, systems, and rollout
of services in a systematic manner. The space industry has played a key role across several application areas, including weather
forecasting, geological and oceanographic studies, disaster management and agriculture, to name a few. Satellite broadcasting
services have been the mainstay of the Media and entertainment industry in India, benefitting a large part of the population. India
accounted for approximately 2.6% of the global space economy in 2020 amounting to US$9.6b, which was 0.5% of gross domestic
product (GDP) in the country.
Indian space segments
Upstream Downstream End users
Satellite manufacturing Ground segment Maritime

Market value (2020/2025) Market value (2020-2025): Media and entertainment
US$2.1b/US$3.2b US$3.1b/US$4.0b
Aerospace and defense
CAGR:8.1% CAGR: 6.9%
Transportation and logistics
Launch services Satellite services Telecom
Market value (2020/2025) Market value (2020-2025): Agriculture

US$567.4m/1,046.6m US$3.8b/US$4.6b Others
CAGR:13.0% CAGR: 4.2%
Source: Mordor Intelligence, Allied Market research, EY analysis
Increased participation of private players in the space value chain
In India, the space segment has been largely under the purview of the government. The satcom business is regulated by the
Department of Space (DoS) and the Department of Telecom (DoT). ISRO is the primary service provider focused on building
rockets and satellites. At the same time, the private sector’s participation has been around providing built-to-suit and other
manufacturing/outsourced manpower supply tasks in the Tier-2/Tier-3 vendor category. With a steady increase in space missions
in the last decade, there is a greater need for private companies to move up the value chain and evolve into full scale satellite/
launch vehicle manufacturers.
India space infrastructure value chain
Equipment manufacturers R&D institutions Tier 1 suppliers
Primary integrator (ISRO) Tier 2 suppliers
Engineering services University research Tier 3 suppliers
Source: “New space in Asia”, ESPI, February 2021.
23
India fares well in terms of spacetech companies. There were a total of 368 spacetech companies in India in May 2021, occupying
5th position among countries globally. This gives tremendous impetus to the space program in India and positions the country for
accelerated growth.
Number of spacetech companies by country, May 2021
The US 5,582
The UK 615
Canada 480
Germany 402
India 368
China 288
France 269
Spain 206
Japan 184
Israel 179
Source: “SpaceTech industry 2021 / Q2: landscape overview”, SpaceTech Analytics, May 2021.
2.1 Satellite manufacturing: Make in India initiative to spur growth

The satellite manufacturing segment has largely catered to Currently, the Indian space ecosystem is well developed to
contract manufacturing of launch vehicles by the ISRO. Earlier, manufacture the satellite bus system. However, manufacturing
with a limited number of space missions, ISRO used to provide of critical payloads (e.g., high precision camera) is very
its Intellectual Property (IP) to the private sector players for nascent and has not taken off. In addition, testing of satellites
getting manufacturing assistance in the form of manpower plays a very important part in ensuring robustness and
and machinery. It led ISRO to be the key service provider while longevity. Rigorous testing is required for larger and critical
the private sector’s role was limited to non-IP manufacturing satellites. Currently, the test facilities in India are with ISRO.
tasks.
With the advent of small satellites, the satellite manufacturing Indian satellite manufacturing opportunity (US$b)
offers huge opportunities to many companies. New age LEO 3.2
players are showing interest to leverage Indian companies
for locally built satellite communications equipment.
2.1
Foreign companies are looking to reap the benefits of
satellite manufacturing services in India. Coupled with the
government’s ‘Make in India’ initiative, satellite manufacturers
are ideally placed to capitalize on the growing demand for
small satellites.
2020 2025
Source: EY analysis based on market estimates
24
Spacetech parks to provide impetus to satellite manufacturing in India
Setting-up space parks across the country is likely to give a fillip to companies operating across the space value chain, especially
manufacturing. It will be key to attracting global startups working in the space sector and help to incubate spacetech companies
in India. Space parks will provide a ready ecosystem for SMBs and startups focused on component and sub-component of satellite
manufacturing. In addition, space parks can significantly improve the unit economics of satellite manufacturers by using shared
resources and facilities. Apart from satellite manufacturing, space parks can be a breeding ground for companies in the satellite
application space. It will help to come-up with new business cases in the downstream segment and identify revenue generating
potential.
Case study in Indian space – Ananth Technologies
Company Overview Offering
Founded in 1992, Ananth Technologies Ananth provides electronic systems

Ananth manufactures critical aerospace engineering and manufacturing with
Technologies systems and offers high-value both build-to-print and build-to-spec
geospatial services. approaches.
Differentiator
In June 2022, Ananth Technologies launched India’s largest private spacecraft manufacturing facility in Bengaluru. It is a
15,000 sqm facility containing four independent modules. The facility is located at the Aerospace Park of the Karnataka
Industrial Areas Development Board. All the four components of the facility can perform end-to-end integration of
processes in four different spacecraft classes.
Source: Ananth Technologies website, “India’s first private spacecraft manufacturing facility launched in Bengaluru,” The
Hindustan Times, 2 June 2022.
Case study in Indian space – Azista-BST Aerospace
Company Overview and offering
The company is a Joint Venture (JV) between Azista Industries (Azista) and Berlin Space
Azista-BST Technologies GmbH (BST). The JV is developing a facility in Ahmedabad to manufacture small
Aerospace satellites in 50-150 kg range. The facility is expected to have an annual production potential
of ~250 satellites.
Source: Azista-BST website
25
2.2 Space launch market – private participation is set to increase
Over the years, India has become a leader in third-party Emerging technologies such as reusable launch vehicles,
launch services. India boasts of one of the highest launch two-stage-to-orbit (TSTO) rocket launch vehicle that provides
success rates in the world for Polar Satellite Launch Vehicle propulsion consecutively, semi-cryogenic engines, etc., are
(PSLV). During 2014 to 2019, ISRO generated more than compelling mechanical engineering industries to relook
US$167.5m revenue by the launch of satellites from 26 existing business streams and diversify into new avenues in
countries3. India launches satellites for nations such as the US, the space domain.
Canada, the UK, Germany, and Singapore.
The Indian space launch services market will grow owing to
India stands at the cusp of a technology-led transformation. economical launch services, rise in navigation satellites, and
Several companies are utilizing cutting-edge technologies to increasing demand for communication satellites. Also, Indian
develop innovative solutions in the space domain. As such, companies are putting efforts to make the country as a hub
supporting independent launch solutions of Indian private for small satellite launch. ISRO is also showing interest in the
companies for satellites and other spacecrafts is in line with small satellite market as it is building a small rocket with a
the ‘Atmanirbhar Bharat’ vision. They have built considerable capacity to transport satellites 500 to700 kg to LEO.
expertise around the launch of LEO, MEO, and GEO satellites
and orbit management solutions. The launch segment is fast
becoming a key focus area for startups and small and medium 828 1,04
businesses (SMEs) in India to drive the innovation agenda and 734 932 127
162
make use of new revenue opportunities. 647 111
567 828 143
98
85 734 127
647 111 702
567 622
98 549
India space launch services opportunity (US$m) 85 482 885
789
702
1,047 622
549
482 932 2020162 2021 2022 2023
828 143
734 127 2020 2021 2022 2023 2024
Commercial Government202
and
647 111
567
98
85 885
789 Commercial Government and Military
702
549 622
482
2020 2021 2022 2023 2024 2025
Source: Allied Market Research

Commercial Government and Military
Entry of private players will lead to more innovation in the space industry
Indian space launch is expected to get a boost due to the government’s positive step towards the inclusion of private players in the
Indian space ecosystem. The entry of private players will only help the industry to become competitive. The availability of low-cost
satellite launch vehicles coupled with mass production will lead to demand from the customers around the world. Indian private
companies are looking to exploit the space industry by using innovative technologies.
3 Proposed satellite launch raises ‘Swadeshi’ lobby’s eyebrows, The Sunday Guardian, 20 February 2021
26
Case study in Indian space - Skyroot
Founded in 2018 by former ISRO Manufactured a 3D printed Cryogenic

Skyroot engineers, it is an Indian aerospace rocket engine capable of running on
Aerospace company looking to develop Cryogenic propellants liquefied natural
economical launch vehicles gas and liquid oxygen.
Differentiator
In comparison to conventional manufacturing of rocket engine, Skyroot showcased 100% 3D-printed bi-propellant liquid
rocket engine injector helping to lower the mass by 50% with a decrease in the total number of components and a
reduction in lead time by 80%
Source: “Start-ups to drive India’s quest for a chunk of small satellite launch pie”, Business Standard, 9 March 2021; “Top 10
Space Tech start-ups in India”, VCBay, June 2021.
Case study in Indian space – Bellatrix Aerospace
The company works on advanced Developed electric propulsion systems

Bellatrix rocket propulsion and in-space – Hall Effect thrusters
Aerospace propulsion systems.
Differentiator
In May 2021, the company has successfully tested India’s first privately developed hall-effect thruster, an electric
propulsion engine for micro satellites weighing 50-500 kg. The new thruster will provide a reliable propulsion solution to
small satellite manufacturers.
Source: “Bellatrix Aerospace successfully tests India’s first privately developed hall-effect thruster”, The Economic Times,
May 2021.
27
Case study in Indian space - Agnikul
Founded in 2017, Agnikul is an Indian Aimed to develop and launch its

spacetech start-up based in National small-lift launch vehicle ‘Agnibaan’
Agnikul
Center for Combustion R&D of IIT by 2022
Madras, Chennai.
Differentiator
Agnikul launched the world’s first fully 3D rocket engine, the ‘Agnilet’ a semi-cryogenic rocket engine. The entire rocket
engine is 3D printed from top to bottom and can directly be used in the rocket. It was India’s first space start-up that
entered into an NDA with the DoS, Department of Space under the newly established Indian National Space Promotion and
Authorization Centre (IN-SPACe).
In July 2022, Agnikul opened a private rocket engine factory in Chennai. The company planned to use additive
manufacturing technology to build 3D printed rocket engines. It will primarily be used for its own in-house rockets.
Source: “Top 10 Space Tech start-ups in India”, VCBay, June 2021; “Spacetech start-up Agnikul Cosmos builds Made-in-India 3D
printed rocket engine, Agnilet”, Yourstory; “Agnikul Cosmos opens India’s first private rocket engine factory in Chennai”, Mint, 13
July 2022.
2.3 Satellite services and applications

Today, satellites have the potential to bridge the digital India is looking to leverage the satellite communication
divide in India. Apart from providing basic connectivity and technology across various industries for multiple applications.
broadband services, satellite communication is likely to For example, for monitoring the national/state borders, the
impact various industries in India. For instance, satellites technology assists the security and defense forces. Due to
can provide connectivity for teachers and students to access the rising national threat from ocean and land, the adoption
resources in rural and remote areas. The ubiquity of satellite of satellite communication is accelerating in the country for
communication, quick access, and cost-effective features mitigating the threat. In March 2021, ISRO launched the
make it an attractive proposition in the education sector. Sindhu Netra satellite to monitor and track the movement
Offering digital health solutions in remote areas through around the Indian Ocean region.
satellites is likely to open-up nascent opportunities. Further,
satellites will play a critical role in the proliferation of the IoT
sector and help to realize the full potential of interconnected
devices. The government should promote the significance
of satellite-based communication services in the nation’s
broadband agenda and other-satellite based applications.
Holistically, educating the public and other stakeholders about
space-based technology and capabilities will invoke a lot of
interest.
28
India satellite services and application market (US$m)
4,647
4,440
4,247
3,886 4,049
3,784
2020 2021 2022 2023 2024 2025
Indian satellite services market by end-user industry (US$m)
189
181
174
167 981 Others
158 161 928
879
830 246 Retail and
761 789 235 Enterprises
224
213 928
198 204 883 Aerospace
841
798
739 762 172 Defense
165
158
146 151
142 Aviation
879 918
803 841
753 772
Government
Media and
1,052 1,086 1,129 1,170 1,213 Entertainment
1,034
2020 2021 2022 2023 2024 2025
India satellite services market by type (US$m)

16
15
15 396
14 376 Space ﬂight
13 14 357 192 management
338 183
311 322 174 378 services
165 358
153 158 339
304 320
293 Remote sensing
Mobile satellite
services
3,089 3,212 3,362 3,509 3,665 Fixed satellite

3,014
services
Consumer
services
2020 2021 2022 2023 2024 2025
29
Various satellite services and use cases
Services Brief description Services Brief description
Consumer services
Transmitting video channels that

Satellite broadband offers network
are received by Direct Broadcast
connectivity via low-earth-orbit or
Satellite (DBS) or Direct-to-Home
geostationary satellites. It provides
Satellite TV (DTH) companies. These companies Satellite broadband
services including voice over internet
leverage satellites to provide TV
protocol (VoIP), high-definition TV
channels directly to the homes of
(HDTV), and video on demand
service provider subscribers.
Mobile satellite providers have the

capability of providing vast coverage
Satellite radio providers can use the
Connectivity in for mobile/broadband services
Satellite radio service to broadcast audio channels
remote areas particularly for people where
to customers.
terrestrial mobile network becomes
inaccessible.
Fixed satellite services
These services are provided for

multiple industries including
customers lease bandwidth
maritime, aviation, enterprise,
capacity by a satellite operator, as
Transponder Managed network government, and telecom. It includes
the transponder leasing agreement
agreements services network interconnection, terrestrial
transmit data from ground fixed
connectivity, satellite terminals, and
station to end-user location.
a management portal and APIs for
service providers and customers.
Mobile satellite services
Satellite networks have the Satellite networks have the capability

capability of offering video of offering voice communication
Video communications services to the Voice services to the land, aviation,
land, aviation, maritime and M2M maritime and M2M (machine to
(machine to machine) markets. machine) markets.
Satellite communications help in

Satellite networks have the
monitoring and tracking of movement
capability of offering data
Tracking and of goods (goods, oil and gas travelling
Data communications services to the
monitoring by sea). Ocean surveillance is one
land, aviation, maritime and M2M
the services provided by the satellite
(machine to machine) markets.
communications.
30
Services Brief description Services Brief description
Remote sensing
By using satellite imagery and

client-provided geospatial data, Photographs captured using satellite
data-rich maps are produced for Reconnaissance and imagery are leveraged by
Aerial services and
various industry applications and intelligence government for various intelligence
digital mapping
such as agriculture, disaster missions purposes and other defense
management, energy, and applications.
environmental monitoring
Satellites helps in providing

surveillance observations of the Satellite remote imagery is being
Earth’s surface by leveraging visible Agricultural leveraged by farmers and ranchers
Weather and terrain
spectrum photographs and infrared monitoring and for monitoring crop conditions to
mapping
imagery to observe atmospheric management predict crop yields and soil moisture
moisture and cloud. It allows for irrigation management.
monitoring of weather conditions.
Satellites helps in offering various

relevant information/observations
of a natural disaster. This assists in Satellite imagery is used for the
Disaster better management and planning of demarcation of states/nations
Border mapping
management a calamity. Satellite communication boundaries helping in resolving
along with navigation systems border disputes.
play a critical role in disaster
management.
By leveraging satellites, researchers

can study the ocean. Also, data
captured using satellites provide
information on sea surface Meteorological satellites offer a
temperature, ocean colour, coral way of gathering weather data
Oceanography reefs, and lake ice. Data collection Meteorology to accelerate ecosystem models.
systems are used by satellites to Meteorological satellites offer
relay signals by transmitters on estimates of surface temperatures.
the ground —used in applications
including measuring tidal heights
and the migration of whales.
Source: EY analysis
31
Advancements in technology is driving new satellite services
Services Brief description
Satellite IoT provides organizations with the capability to monitor and track their assets.
IoT Combining satellite technology with terrestrial IoT will be key for enterprises to ensure
connectivity to their assets, no matter where they are.
Cybersecurity and data Satellite companies provide cybersecurity and data protection services to protect
protection confidential data by leveraging the communication satellite services.
Satellites are being leveraged for providing virtual education/learning experiences to

children. During the Covid-19 outbreak, ISRO committed to provide satellite TV classrooms
Remote education / learning for rural India. It helps in bridging the gap in the rural parts of the country. As satellite
classrooms offset the need for laptops, smartphones, or the internet for virtual classroom,
it helps in overcoming the challenge faced in attending online classes.
Satellite navigation – growth in the position, velocity, and timing (PVT) services
ISRO offers satellite-based navigation services for meeting services: 1) Standard Positioning Service (SPS) – offered to all
the demands of civil aviation along with the user needs the users; 2) Restricted Service (RS) - an encrypted service for
for positioning, navigation, and timing based on satellite authorized users only.
navigation system. For civil aviation needs, ISRO works
in collaboration with the Airport Authority of India (AAI) Due to the rapid growth witnessed in the applications relying
for developing the GPS Aided Geo Augmented Navigation upon the position, velocity, and timing (PVT) services offered
(GAGAN) system. For the consumer market, navigation and by space-based navigation systems, the Department of Space
timing services, ISRO is working to set up a regional satellite (DoS) is looking to draft a comprehensive plan for the satellite-
navigation system known as the Indian Regional Navigation based navigation system. As of now, globally, there are four
Satellite System (IRNSS). Global Navigation Satellite Systems (GNSS) providing PVT
services: GPS from the US; GLONASS from Russia; Galileo
IRNSS will provide position information offering to users in from European Union, and BeiDou from China. Also, NAVIC
the country in addition to covering region extending up to (operational name of the IRNSS) and QZSS from Japan
1500 km from its boundary. It will primarily offer two types of provide navigation services within the prescribed area.
Case study in Indian space – Pixxel
Pixxel is an Indian space-technology The company plans to launch a series

firm that plans to build and operate of satellite constellations that would
Pixxel nanosatellites to collect, monitor and contain a total of 36 hyperspectral
analyze data through imagery satellites by the end of 2023.
Differentiator
The company is planning to launch the world’s highest resolution hyperspectral satellite constellation. Hyperspectral
imaging is a specialized field of satellite-based imagery, which offers a significantly richer set of data by observing a wide
spectrum of light — instead of just primary colors. The company also offers a data analytics platform that other companies
can use.
Source: “Space start-up Pixxel readies satellites to relay data to help farmers, forests”, Mint, 1 December 2021; “Space tech start-
up Pixxel to launch 36 hyperspectral satellites by December 2023”, The Hindu, July 2021.
32
2.4 Ground segment
The network operation centers and earth stations on the ground comprise a satellite communications system or network.
Gateways and earth stations are leveraged to control satellites along with up-linking and down-linking of data from satellites. The
ground segment is connected with an end user’s equipment directly or via a terrestrial network.
Indian space ground station equipment market (US$b)
4.0
3.8
3.5
3.1 3.3
2020 2021 2022 2023 2024
Source: BIS Research
Case study in Indian space – Astrome Technologies
Founded in 2015, Astrome is a Aims to launch a constellation of 198

Astrome deeptech startup focused on millimeter satellites into LEO, each carrying
Technologies wave wireless communication next generation communication
technology. transponder
Differentiator
Astrome transponders operate in the millimeter wave frequency range that have better spectral efficiency and a large
amount of unused bandwidth. The company is a pioneer in developing millimeter wave wireless technology for satellite
communications. The patented technology offers 10X higher capacity transponders and high-capacity micro satellites.
Source: “5G deeptech start-up Astrome raises $3.4 million for US expansion”, The Economic Times, September 2021;
Astrome website
33
3
Regulatory landscape and
challenges: liberalization
of the Indian space industry
34
History of India space regulations • T
► he new draft policies introduced over the last year bring
about a radical change in the approach of the government
ISRO, formed in 1969 and later brought under the by way of providing for greater participation of private
Department of Space, has been at the forefront of India’s enterprise in the space industry.
space industry and has been responsible for both upstream as
• T
► he draft Spacecom policy proposes to regulate the
well as downstream space activities in India. The Indian Space
program has had three distinct elements as satellites for commercial use of satellites, orbital slots, and ground
communication and remote sensing, the space transportation stations for communication needs.
system, and application programs. Historically, India’s • A
► new remote sensing policy has been framed with the
space industry has been spearheaded by ISRO with limited objective of enhancing stakeholder participation and ease
participation and support from the private sector. It has been of data access. Under the new policy, remote sensing
a long-standing demand of the private sector to liberalize the data having ground sampling distance coarser than 50
governing regulatory norms to open up the sector so as to centimeters shall be easily available, leading to higher
realize the full potential of India’s space capabilities. resolution data accessible for various users. Further, private
enterprises can now undertake design development and
realization of satellites and associated remote sensing
systems.
Challenges in previous policies
• G
► iven the substantial rise in applications relying on position,
India has historically relied significantly upon foreign satellite- velocity and time services, the government has proposed a
operators for vital services such as broadcast communications comprehensive policy for satellite navigation to strengthen
and navigation. There is a shortage of communication / the self-reliance for Indian Global Navigation Satellite
broadcasting transponders, gaps in remote sensing and Systems.
navigation systems coupled with the growing need for orbital
• G
► uidelines for acquiring and producing geospatial data and
resources. There is a need to develop a decentralized space
geospatial data services have liberalized of the mapping
ecosystem with greater participation from the industry.
industry and democratized existing datasets to spur
Given that the space industry touches all domains of life and
innovation, enable global competence and to boost blue
the downstream use-cases are increasing exponentially, a
economy in India, where geospatial data is expected to play
comprehensive regulatory policy framework was required to
a potentially important role.
combine the drive of the private enterprises with their new
age disruptive technologies with the strong legacy of ISRO
and the continuous support of the Government.
To meet the growing communication needs for socio-economic Measures to simplify the regulatory landscape
development, improving access to remote regions, national and propel the sector towards growth
security, enterprise and consumer services, the demand for
satellite bandwidth is increasing rapidly. Emerging terrestrial • U
► nder the current framework, regulatory approvals are
technologies such as 5G, 6G and Internet of Things (IoT), etc., required from multiple agencies such as DoS, DoT and/
might result in larger demand for satcom capacity, leading or MoIB for establishment of upstream/downstream space
to a need for comprehensive regulatory environment that activities. Such agencies have varied and different objects
aids in developing end-to-end capabilities for satellite -based at times. A single window approval process through a nodal
communication systems and applications. body focused on space economy shall aid and ease the
process of having in place requisite authorizations that shall
further help ease of doing business. In line with the TRAI
recommendation, regulators may publish an approved list
New proposed regulatory policies of foreign satellites from whom capacity can be directly
procured by the buyers. This shall help expedite the
• T
► he Government has introduced new draft policies for licensing process.
space communication, navigation, and remote sensing
with a view to usher and enable a regulatory environment,
making it easier for private players to leverage their
technology, innovations, and capital for the advancement
of the industry. With the liberalization proposed in the new
policies, India Space 2.0 has been given a significant push.
35
• U
► nder the present licensing regime, the service license • T
► he space sector may have far-reaching benefits for a
holders are required to set up their own earth stations. large and diverse geography such as India. Liberalized
However, with increasing complexity in the technologies spectrum and licensing/authorization policies and
being used, satellite operator shall be permitted to set up regulatory framework would provide necessary agility to the
their own earth stations and deliver services to the service authorities to address socio-economic needs.
license holders who in turn will render to the end-users.
• I► SRO can act as an enabler for boosting research and
• T
► here is a need for coordinated effort on part of the development by way of technology transfer, collaborations,
stakeholders and the regulators along with the government and sharing of infrastructure that shall help achieve wider
towards protecting India’s interests in the international participation from the industry. Further, the government
forums towards of orbital resources and slots. acting as an anchor customer shall go a long way in helping
startups in the industry.
• T
► he enactment of the space legislation would help bring
about clarity in the governing norms along with policy Space insurance is yet to evolve in India. It has always been
predictability and certainty, thereby boosting investor a sovereign subject. There is a lot of emphasis on the life
confidence leading to more investments and enhanced cycle management of satellites. However, there is no specific
participation of non-governmental/private sector agencies. emphasis on the de-orbiting of satellites. There is a need to
There may also be a need to align other legislations, such look at how other countries have promoted space insurance.
as telegraph laws, to avoid any jurisdictional overlap and
regulatory ambiguities.
• A
► comprehensive space policy covering upstream and
downstream activities will help guide the vision and provide
policy predictability to enhance the investment climate.
Global regulatory approaches to space insurance
Countries Law on space liabilities
Section 16 of the Commercial Space Launch Act, 1984 mandates obtaining liability insurance under a license
The US
issued for an amount as is considered necessary by the secretary of the US.
Section 10 of the Outer Space Act 1986 mandates indemnification to Her Majesty’s government in the United
The UK Kingdom against any claims brought against the government in respect of damage or loss arising out of
activities carried on by the licensee.
Article 13 of the French Space Operation Act, 2008, mandates absolute liability for damage on ground and
in air space for third party liabilities, while the liability is on a fault basis for damage caused in outer space.
Further, there is a limitation for the term of liability up to one year from the date of fulfillment of obligations
France
mentioned in the license. Article 14-15 limits the claim for compensation from the French Government to
a fixed ceiling of €60m and the private space operator is liable to reimburse for indemnifications exceeding
€60m
• U
► nder the Draft Space Activities Bill, 2017, Section 8(2)(h) proposes third party insurance· Section 12
mandates indemnification of central government subject to a quantum to be decided by the Government.
• S
► ection 13 proposes punishment with imprisonment of not less than one year but up to three years or with
India a fine of not less than one crore rupees and for continuing offences with a fine of INR 50 Lakhs per day for
not obtaining a license.
• S
► ection 25(2) proposes that any IP rights created onboard a space object shall be deemed to be a property
of the central government
Source: Mondaq
36
Countries Law on space liabilities
• T
► hird-party liability (TPL) requirements cover both launch and in-orbit operations. TPL insurance or an
equivalent financial guarantee is mandatory by law for an amount of €60m for launch operations and
€50m to €70m for in-orbit operations.
• A
► n operator may be exempted from the obligation to take out insurance or provide a financial guarantee
France
for a limited duration if it is proven to be impossible to take out insurance because cover is not available in
the insurance market.
• T
► o benefit from this exemption, the operator must file a request with the Ministry of Economy and produce
evidence regarding its financial standing as part of its request.
Source: Lexology
37
4
Space startup ecosystem and
investment climate
38
4.1 Investment in space startups in India
In the last five years, the Indian space startup space has emerged strongly and is abuzz with activities. Currently, there are over50
space startups in both the upstream and downstream segment of the space value chain in India.4 New age companies focusing
on the upstream segment are engaged in making satellites, rockets, rocket fuel, and propulsion systems. While companies in the
downstream are focusing on developing analytical skills to generate insights across industries and coming up with innovative
applications.
Local business conditions and capabilities are acting as a key catalyst for the development of the spacetech startups in India.
A thriving Micro, Small and Medium Enterprises (MSME) ecosystem in India is the perfect bedrock for the spacetech startup to
develop. Companies can take advantage of the already established supply chain of ISRO for manufacturing and testing of satellites
and rockets. To add to it, startups will be able to greatly benefit from experienced space scientists in India who have significant
mission experiences as well as leverage world-class academic institutions. Overall, the focus of the startups is on developing
original IP for space-based products/services, capitalizing on the gaps in the local market, and inherent understanding of local
issues and challenges. Spacetech startups in India can potentially scale-up the solutions/products across other emerging markets,
where challenges and requirements are similar to India.5 Increasingly, spacetech companies are looking for strategic partnerships
to leverage and make use of each other’s expertise.
New space companies’ breakdown by segment in India
Satellite/spacecraft subsytems
11%
7% Satellite applications
39% Education
11%
Launch vehicle
32%
Others
Source: ESPI
Investment in Indian space startups (US$m) Number of rounds of investment in Indian

space startups
11
68
9
23
2020 2021 2020 2021
Source: The Hindu Business Line
4 “New space in Asia”, ESPI, February 2021.

5 “New space in Asia”, ESPI, February 2021.
39
Number of new spacetech startups in India
47
100
Total number of spacetech startups in
11 India at the end of 2021
7
2019 2020 2021
Source: The Hindu Business Line
Investors are showing greater interest in the Indian spacetech sector owing to a combination of factors. It is in line with global
trends as investors are finding the space sector attractive owing to the emergence of several success stories.
Key factors for investment in Indian space segment
The government’s
Promise of
push for inclusion Lower costs for Increased market Technological
substantial Return
of private players developing and demand for advancement in
on Investment
in the space launching satellites geospatial data the space industry
(RoI)
segment
Source: “Investor interest in Indian spacetech start-ups takes off. Here’s why”, YourStory Media, May 2021; EY analysis
However, the startup ecosystem is not without its share of challenges. Access to capital is the biggest challenge today. Historically,
investors have treaded with caution when dealing with the Indian spacetech start-up ecosystem. Lack of private participation
in the space economy was clearly a major deterrent. Large-scale private investments in the upstream segment have been a
challenge owing to higher barriers to entry, strict regulation, and a high risk of failure.
Key challenges/issues for startups in India
Preference for
Perception of long Lack of
Lack of access investments in Lack of business
gestation period of institutional
to capital the downstream models
investment support and policy
segments
Source: EY analysis, ESPI
40
41
5
Enabling defense - space
enterprise to lead global
innovation
42
Space, the dual-use disruption, is fast emerging as the major The Honorable Prime Minister’s initiative to unlock the space
multi-dimensional and multi-faceted force enabler for defense sector by allowing private industry to undertake commercial
forces, globally. Cheap and easy access to space technology space activities as well as supporting defense space capability
is fueling a global race to build military space capabilities is well timed and would significantly contribute to building a
which would enable them to ensure safe, secure and assured “credible and resilient Space Force”. This Space Force would
friendly use of space domain to serve their national interests, be a foundational component of our Comprehensive National
while also creating deterrence capabilities to disrupt the use Capability to ensure a decisive response whenever and
of the same by their adversaries. India has established the wherever needed.
Defense Space Agency (DSA) to address all defense space
requirements including protection of all its space assets.
Increasing role of spacetech startups in the defense space domain
Our space industry also has to deal with departments like DoS, DoT, ISRO, IN-SPACe, NSIL, DST etc. as well as other user
government department. Further, the defense and security customers for our industry could include DSA, MoD, MHA, DoT, DRDO,
Defense Services, DPSUs, NTRO, CAPF, police forces, disaster management agencies etc., as per use case.
We are now seeing many startups getting into the space domain, wherein some have shown encouraging achievements. They,
along with the existing space industry companies, would form the backbone of the defense space industry enterprise. Many of
them are building unique, innovative and disruptive solutions which could potentially be game changer for Military Space and
Warfighting besides addressing the requirements of governance and socio-economic development to enable the common man.
Focused attention is needed to understand the nuances of the space ecosystem. Given the enormity, complexity and challenges of
space domain, India will need a “whole of nation approach” to develop, deploy and operationalize cutting-edge industrial capability
as per user needs as well as to make them successful as a global business enterprise.
Key considerations, applicable to multiple departments, need attention to strengthen the space sector,
especially defense space in India
Need for an • S
► tronger push needed within the government system to improve adoption and absorption of
enabler mindset technology and upgrade methods of working.
with a technical • S
► trong need to break through inertia of old methods and adopt new methods, process and SOPs
perspective needed to handle the dynamic and fast-moving technology cycles.
• E
► nable single window handling with simplified processes and methodologies through a “Web-
portal” to effect transparent/responsive processes for permissions, licensing, issues and grievances
with time sensitivity (time-bound/automatic/deemed approvals or clearances etc., where feasible).
Status update, auto-alerts for delays in resolving grievances, options for reverse feedback
mechanism, automated escalation to senior officers beyond specified time limits could be some
powerful enablers to strengthen the ecosystem system performance.
Enabling ease of
doing business • F
► ocused interventions to reduce/cut red-tape which result in time-delays.
• E
► stablish a robust helpdesk to help startups/MSMEs in navigating through government processes
(including inter-ministerial processes).
• E
► nsuring level play field for private industry vis-à-vis government PSUs/ Departments in terms of
competition and processes. Industry needs to be considered as co-traveler and co-partner in all
spheres including strategic domain.
43
• S
► ingle Window Web-Portal based converged Facility Availability & Booking System (FABS) to enable
Easy access Easy Access to Facilities (Technical, testing and certification: managed by MoD, ISRO, DRDO, DST
to facilities or any other government departments managed labs etc.). Web-Portal features could include,
(technical/testing/ Lab facilities availability, rules/regulations, charges, dates/time of availability, instant payment
certification) calculator, payment gateway for instant booking, etc.
• H
► igher authorities may audit periodically the Facility Booking Management System
• T
► imely payment of dues to startups/MSMEs to reduce cash-flows challenges.
• W
► eb-Portal based tracking (with query/reverse feedback mechanism); automatic escalation,
Timely payment of monitoring and monthly follow-up of delays, in case delay of payments exceeds 30 days (post
Dues submission of invoice and grant of ATP clearance by User), could be helpful. A special mechanism/
Cell could supervise to monitor delays and help in addressing issues, where necessary.
• P
► rovision of payment of penal interest to companies by departments for delayed payments.
• S
► trengthening HR capabilities/capacities of institutions, agencies and departments handling
defense space with skilled HR to deal with multi-faceted, multi-disciplinary and multi-dimensional
issues.
• S
► kill areas would include: (1) Domain/technical experts; (2) Project management skills; (3) IPR and
Human resource legal experts (including space law experts); (4) financial/investments experts.
capital
• C
► reation of the potential talent Pool could include: (1) Experienced serving officers/veterans from
defense and security establishment with hands-on experience; (2) Retired/on-deputation scientists
from DRDO and ISRO; (3) Experts from industry, academia, and BFSI institutions. *Creation of
talent pool by IN-SPACe, comprising retired scientists, is a positive step for emulation by other
agencies.
• L
► onger fixed tenures for project managers (with domain expertise) handling projects for continuity
and faster realization of projects. Consideration to give at least six months overlaps between
dealing officers in Project Management and R&D role to ensure proper transition/handing over.
Handholding, • H
► and-holding Entrepreneurs in terms of constant guidance; regular feedbacks; and easy/direct
coordination and connect with users. A robust coordination mechanism at directorate level managed through a Core
project management Committee could be very helpful for defense space.
• A
► ccurate articulation of user requirements, expected deliverables, deployment environment and
operational utilization would be an important step. Skilled experts with domain expertise may be
engaged to translate user needs for accurate engineering requirements.
• S
► pace technology has long gestation period and has limited market budget allocations to facilitate
Conduct of trails trails and technology demonstration. No cost and no commitment (NCNC) system pose financial
challenges and lacks accountability/commitment from user end.
• D
► emands from friendly countries received by MEA may be shared with the Indian space industry for
providing solutions.
• M
► EA may consider providing Lines of Credit (through EXIM Ban) to support projects in foreign
Routing of foreign
countries being undertaken by the Indian private industry.
demands by MEA to
industry • I► ndian Embassies could promote products of Indian Companies in foreign countries (including
defense attaches/ military attaches for defense space products). They could act as a bridge to
connect Space Industry at either end. Webinars to Spread Awareness of Indian Technology in
friendly countries, facilitated by embassies, could be good enablers.
44
National listing • A
► web-portal for national listing of companies (including startups/MSMEs) for technology and
of companies and products developed along with details of patents applied/granted could be included. This would help
products avoid duplication, besides providing a credible database of national capability.
• D
► efense Space technology development is capital intensive with long gestation periods with low
Strengthening visibility on scale and scope of demand. Hence, there are limited investors in this space which is
investor interest critical for startups.
in Defense space
• R
► efinement in iDEX/TDF terms and conditions would encourage more startups to opt for iDEX/TDF.
start-ups
This would invite investor funding in defense (Space) startups and make them scalable. Further, this
Refinement in would also help tide over funding challenges for Startups.
IPR terms and
• V
► isibility/Predictability on demand would help in determining market potential and viability
conditions for iDEX
and TDF • I► mproved investment friendly policies and guidelines would make it lucrative for private funding
agencies and VCs to pump in funds to bring scalability and growth.
• A
► dequacy of funding and easy access to available funding options still remains a challenge.
• G
► overnment may support setting up of public/private investor funds/ fund of funds to support
Funding strategically important companies. This would include both seed funding in Deep Tech areas as well
mechanisms as in level A, B and Cs.
• M
► obilizing Indian business houses and investment firms/agencies would be key to ensuring critical
technology startups remain Indian in terms of ownership.
Refinements
in DAP/DPP to • C
► onsideration may be made to add a special chapter for procurement of space related Technology/
accommodate products/solutions in the DAP/DPP by MoD to cater for the unique character and challenges of the
uniqueness of Space space domain.
related products.
• ► Some of the models for consideration could include the following:
• ► Industry engagement through consortium mode.

• ► Allowing single consortium/single vendor to participate in niche specific areas.
• ► Data as a Service (DaaS); Infrastructure as a Service (IaaS; Platform as a Service (PaaS)
• ► iDEX/TDF/make-route supported dual-use startups/companies/consortiums could be scaled up by,

Business models
(1) using private investments (enabling IPR conditions and guidelines); and (2) permission to offer
services at both national/ global level (to whitelisted global clients); (3) assured buy back of satellite
data and products by government departments placing consolidated demands (DaaS model) from
such platforms.
• ► Above steps would help Indian companies stand-up to global competitions (possible upscale to
unicorns) in sectors like ISR, PNT, data analytics, communication, applications etc., to name a few.
• A
► progressive space policy and space bill with enabling guidelines offering long-term stability,
facilitating a responsive single window clearance mechanism is the need of the hour.
Legal and policy • I► ssues relating to Insurance and liability could be a major determining factor in space business
frameworks viability.
• C
► onsideration to create a contributory insurance pool for companies with government support.
Cost of insurance subscription could be a major determinant for business growth in this sector.
45
• A
► standard driven approach towards technology development and procurement may be considered.
Standards This would strengthen quality; enable commonality and interoperability; and bring scalability as well
as sustainability in the long run.
• S
► upportive/ Liberal FDI guidelines.
• G
► ST rebates, tax incentives, Import duty exemptions, PLI schemes and easy terms for bank
guarantees.
Financial enablers
• L
► ow interest and long-term loans need to be enabled to improve financial viability of the sector.
• W
► aiver in LDs arising out of delays in receipt of components from foreign sources
(chip/silicon issues).
Source: ISpA (gathered from feedbacks obtained from the Indian space industry stakeholders)
Wing Commander
Satyam Kushwaha (Retd)
Director ISpA
46
47
6
Skills development in
the space domain
and empowering youth
48
Indian private universities are coming with programs/ • L
► ovely Professional University, a private university in
initiatives toward the space research by training students North India, established a Centre for Space Research
on various aspects of the industry. The universities are with mission control facility allowing students and
introducing courses on multiple facets in the aerospace researchers to communicate with the International Space
industry while providing training to students by former ISRO Station along with downloading satellite images in real-
scientists. Skills development is crucial for the space economy time. The purpose of the center is to conduct research
to thrive in India. projects in the space technology along with conducting
awareness sessions related to space research and remote
sensing. Also, the students will undertake technical and
Primary areas for skill development in space
professional development training on different modules
domain
including installation of the ground station, satellite
• T
► here is a need to develop the competency of systems tracking till data set collection.
engineering. It is currently not there in India. • C
► handigarh University, a private university in Northern
• No academic focus on systems development for the Indian, introduced Student Satellite Designing and
space segment Training program ‘CUSAT’, an advanced training program
for the students in aerospace engineering. The program
• Companies are incurring a substantial cost in training
will include study of Integration of components, satellite
people on systems engineering designing, testing and simulation of launch process,
• There is a need to look at the entire space segment as collection and analysis of data from the satellite. Also,
one system the students will undertake training from the former
Indian and International space scientists. The university
• Remove gaps and streamline interdependence, interface
plans to design a multipurpose nano-satellite which will
and interactivity be launched by ISRO.
• A
► dequate training is required on operating satellites
skillfully. Currently, the private sector is not running
satellites. Case study – Indian Institute of Space Science
and Technology
• With newer software-defined satellites being launched,
there is a need to train people on their operations
The Indian Institute of Space Science and Technology
• N
► eed to develop technology associated with special alloy (lIST) is Asia’s ﬁrst space university. It was established
used for launch vehicles at Thiruvananthapuram in 2007 with the objective
• S
► uccess in the space segment is dependent on rigorous of offering high-quality education in space science
skills development and technology to meet the demands of Indian Space
Programme. The institute offers undergraduate,
• There is a need to have a central system for training postgraduate, doctoral, and post-doctoral programmes
resources in the space segment in broad areas of space science, technology, and
• Setting-up a separate training body may be an option applications. lIST fosters state-of-the-art R&D in space
studies and provides a think-tank to explore new
• ISRO has let out its facilities. There is merit in including directions for the Indian Space Programme.
training aspects as part of this program.
Source: ISRO
Initiatives / Programs undertaken by private
institutes
• A
► mity University Mumbai, a private university in Central
India, is looking to set up Planetary Science, education
and experience station to run space biology research
and the ‘Earth and Space Exploration program allowing
students and researchers to undergo training by space
scientists. It has partnered with multiple local and foreign
institutions for providing the research and training to
students.
49
Notes
50
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created to be the collective voice of the Indian space industry.
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Developing The Space Ecosystem in India

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Developing The Space Ecosystem in India

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Developing the space

Director General, ISpA

Emerging Markets TMT

Lakshmesh B H Narayan Prasad

Dr Pawan Goenka Pawan Kumar Chandana Radhakrishnan Durairaj Rahul Vatts

Maj Gen (Dr) Siva Kumar

EY report development team: Kaustav Bandyopadhyay, Parul Malhotra, Vikash Kukreti

Global space economy to reach

Indian space economy – set for

Regulatory landscape and

Space start-up ecosystem and

Defense space ecosystem – new

Skills development in the space

Functional areas Key considerations

• Facilitate access to cost effective and early-stage capital for startups

Source: ISpA, EY analysis

The global space economy in numbers

Global space US$447b US$600b

Ground US$163b Satellite US$142b

Satellite US$14b Launch

Source: Space Foundation, Satellite Industry Association, EY analysis

Number of operating 5,465

Others 86% Elliptical

Most of the satellites manufactured in 2020 (84%) were used

Changing dynamics of the global space economy

Space segments Enablers

US launches – 40%; Non-US launches – 60% • G

• I► ncrease in IoT and autonomous systems

• I► mproved capability and innovative application of small

Source: Satellite Industry Association, EY analysis

SDG no. SDGs Satellite application areas

1 No poverty Natural disaster forecast; Crop productivity optimization

2 Zero hunger Crop productivity optimization; Livestock management optimization

Clean water and

Decent work and

15 Life on land Bio-geophysical land surface monitoring; Animal tracking

2 “Space Supporting the Sustainable Development Goals,” UNOOSA, https://www.unoosa.org/oosa/en/ourwork/space4sdgs/index.html,

Indian space segments

Upstream Downstream End users

Satellite manufacturing Ground segment Maritime

Launch services Satellite services Telecom

Market value (2020/2025) Market value (2020-2025): Agriculture

Source: Mordor Intelligence, Allied Market research, EY analysis

Increased participation of private players in the space value chain

India space infrastructure value chain

Equipment manufacturers R&D institutions Tier 1 suppliers

Primary integrator (ISRO) Tier 2 suppliers

Engineering services University research Tier 3 suppliers

Source: “New space in Asia”, ESPI, February 2021.

Number of spacetech companies by country, May 2021

2.1 Satellite manufacturing: Make in India initiative to spur growth

Source: EY analysis based on market estimates

Case study in Indian space – Ananth Technologies

Company Overview Offering

Founded in 1992, Ananth Technologies Ananth provides electronic systems

Case study in Indian space – Azista-BST Aerospace

Company Overview and offering

Source: Azista-BST website

2020 2021 2022 2023 2024 2025

Source: Allied Market Research

Company Overview Offering

Founded in 2018 by former ISRO Manufactured a 3D printed Cryogenic

Case study in Indian space – Bellatrix Aerospace